We have participated a loan with a non-affiliate and the loan has now been classified. The non-afffiliate wants us to repurchase the laon. We know that we are prohibited from purchasing a classified loan from an affiliate but we have not been able to find anything that pertains to a non-affiliate. Can anyone steer us in the right direction. Our regulator is the OCC.

Are you obligated to repurchase the participation. If so, then it shouldn't present a problem. If you are not obligated to repurchase the loan, then why would you? Your regulator would not be too happy with that.

I agree, if you are not obligated to repo why do it, one reason to sell a participation is to spread risk and now you would take it back when the risk is highest. Also look to see if you sold the participation because of loans to one borrower limits, that may preclude your repurchase.